Core Services

• guidance on leasing or owning
  commercial property
• strategic vision
• strategic property analysis
• property-related business and accommodation modelling
• relocation management
• relocation review
• property audits
• exit strategies
• space reduction

The Midas Touch

Leader

In this issue of The Midas Touch, we look at the possible threat of rising occupational property costs resulting from the rapid rise and now down-turn in the investment market for commercial property in the UK.

The drive for environmental sustainability is an increasingly popular concern in the business world, and Midas is able to help clients achieve their environmental policy objectives through their use of property. Our core services in space reduction, property-related business modelling and relocation management all result in better use of space and hence more sustainable workplaces. This issue covers news of some of our recent work in these areas.

As ever, please feel free to contact us with your suggestions, comments or questions.

Best regards,

Andrew Pegg
Managing Director

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Viewpoint

Occupiers need to be vigilant in current market

The latest turmoil in the credit and equity markets and increases in interest rates have placed further pressure on the £710 billion UK commercial property market.

This is already being evidenced by a decline in new corporate letting activity - a recent survey by the Royal Institution of Chartered Surveyors points to a drop in new lettings which were at 11.4 per cent in January 2007, but down to just 8.7 per cent in July 2007. And, the market faces a slowdown in price inflation for commercial property in certain locations and for certain types of property, such as the top of the market and sub-prime retail properties.

What does this mean for commercial occupiers? My concern is that the drop in Net Asset Value of commercial property costs will mean that landlords will look to increase or maintain their total return and cover increased finance costs through a hike in rents. This is likely to be the case particularly for prime and some secondary office space which are likely to continue to be in demand, not least because the recent jitters in the financial world have led to a number of prestige building and refinancing projects being stalled.

My advice to occupiers is to be vigilant to any attempts to increase rents, and to get specialist professional advice in good time so that they can continue to focus on developing strategies to maintain profitable growth in their core business activities in the face of rising property costs.

Andrew Pegg, September 2007

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News

Midas saves client thousands in lease-disposal strategy

Midas has recently helped develop a successful disposal strategy for a client holding two surplus industrial units with around 7 years to run on the leases.

The client liability was estimated at around £350,000 after an assumed reletting void and extensive refurbishment. Whilst there was an opportunity to achieve a profit rent after refurbishment, achieving lease surrenders was identified as the main objective to avoid any ongoing contingent liability.

Midas established that the landlord would gain more benefit from reletting the units at a higher rent and could pass on the rental uplift to show an uplift in capital values across the whole estate. This approach was agreed with the landlord and a detailed campaign was developed.

Working closely with a team selected by Midas, including a specialist industrial agent and building surveyors, Midas and the client have now orchestrated the lease surrenders within 3 months and without the need to do any works - thereby saving the client over £300,000.

Our business gains ground with Supply London

Midas has now achieved the status of 'Fit to Supply' with Supply London, a regeneration programme funded by the London Development Agency that facilitates small businesses in London to work in the public sector. As a 'Fit to Supply' business, Midas is able to demonstrate its commitment to its principles and values of providing a good-quality service, safely and in an environmentally responsible manner.

Copies of our policies can be seen in the resources section of our website

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Meet the team

Managing Director - Andrew Pegg
Director of Business Analysis - Chido Ikeyina
Director of Strategic Consulting - Julian Capell
Team PA - Wendy Slane

To contact any of the Midas team, please contact us.

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Best practice

Exploring ways of increasing energy efficiency

Increasing a company's sustainability is not necessarily an expensive or cumbersome undertaking: sustainability goes hand in hand with the changing face of today's work environment.

Here are some areas you may like to consider to improve the operational and energy efficiency of our clients' businesses.

• Investment strategies Investing in the right property is vital to ensuring the productivity and profitability of a company. A good property must be able to adapt to the changing needs of the company and its employees, and it must be affordable.
  A staggering 75 per cent of buildings in the UK are pre-1960 and energy-inefficient. Whilst older buildings may be more expensive to run and a potentially poor investment from both an environmental and an economic perspective, the cost of adaptation may be lower and have a lower carbon foot print than demolition and rebuilding.
• Location, location... Where possible, choose buildings that are accessible by public transport and other amenities. Well-located buildings will significantly reduce the amount of time employees spend stuck in traffic, thereby helping to attract and retain staff as well as improving productivity.
• Space utilization Identifying an effective use of space is essential both in terms of ensuring low energy consumption and reducing running costs. Determining space usage is the key driver. Improving the use of office space, for example in an open-plan layout, can cut costs and reduce energy use if appropriate energy saving measures are included within the design.
• Environmental policies Similarly, environmental measures such as reducing paper usage and recycling, and having an integrated IT and electronic storage system can lead to less space for paper storage which has to be heated and lit.

For more information about our creative approach to office planning solutions and office regeneration, please contact Andrew Pegg at Midas.

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